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Purchase Questions
- I would like to purchase a new home. For how much do I qualify?
- How is the Signature Mortgage approval different from a pre-approval?
- How can I accumulate money for a down payment?
- What you should avoid while undergoing the loan approval process.
I would like to purchase a new home, for how much do I qualify?
Your Signature Mortgage loan officer will evaluate your income, your credit history, your current debt structure, and your assets to determine the maximum mortgage loan amount for which you could qualify. You may also access our payment calculator under "Loan Calculators". Using the various loan calculators, you may evaluate your monthly payments based on different loan programs. In some cases, your loan officer may give you advice to improve your overall financial picture to better qualify to purchase a home.
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How is the Signature Mortgage approval different from a pre-approval?
Unlike many mortgage companies, Signature Mortgage will provide a full approval letter and not a pre-approval or a pre-qualification letter. Your loan officer will need to evaluate your income, credit history, debt structure, and assets to analyze your financial picture and provide an approval letter. Most realtors now require a prospective home buyer to be "approved" before they will submit a contract on a home or in some cases prior to showing property. Check with your realtor or your Signature Mortgage loan officer for details.
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How can I accumulate money for a down payment and settlement charges?
For many potential homebuyers, the money necessary for a down payment and settlement charges is often the biggest obstacle to home ownership. Personal savings is the most common means of meeting transaction cash requirements. Other sources of acceptable cash include the following:
- Monetary gifts from relatives are often an acceptable source of funds for down payment and settlement charges. Typically the transfer of the funds will need to be fully documented. Please, consult your Signature Mortgage loan officer for documentation requirements and any program restrictions on the use of gift funds.
- Seller concessions may be used to pay some or all of your settlement charges. Underwriting guidelines and restrictions on the use of seller concessions vary with different mortgage programs. The nature of the local real estate market may or may not make seller concessions a viable option.
- High loan-to-value loans-Ask your Signature Mortgage loan officer about the loan programs that require little or no down payment, including, FHA, 80/15/5, 100% and 103% financing programs.
- Loans from retirement plans or whole life insurance policies-Many contributory retirement programs include provisions for borrowing against the vested balances in those accounts. Guidelines for such loans are established by the Federal government and the various plan managers. You should check with your retirement program manager or your human resources department to determine whether such a loan may be an option for you. The payments on such borrowed funds will be included in your debt-to-income calculations. If you have a whole life insurance policy, you may be able to borrow against the cash value of that policy. Loans of this type do not typically have a repayment requirement, but may affect the value of the policy
- You may consider selling an asset to raise cash for your down payment, such as a car or boat. Sales must be documented by a bill of sale and evidence of prior ownership. Proceeds from loans against personal property are also acceptable sources of cash for settlement, but the payments are included in the debt-to-income calculations.
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What you should avoid while undergoing the loan approval process.
- Do not make major purchases on credit. Any increase in current debt can have an adverse affect on your ability to qualify for your loan program. Hold off on furnishing your home until you have gone to settlement.
- Do not open new credit accounts. Opening a new account even for the purpose of transferring existing balances will lower your credit scores which may affect your qualification for a loan or the rates available to you.
- Do not payoff debt or close accounts. Borrowers will often make the mistake of paying off or closing accounts assuming that will help their credit scores or their credit worthiness. Closing too many accounts could actually lower credit scores and paying down debt can reduce cash reserves which maybe necessary for settlement. Your Signature Mortgage loan officer can help you evaluate your credit report and advise you on the best options for paying off debt or closing accounts.
- Try not to change jobs. Most loan programs require the lender to verify your employment. If you change jobs prior to making loan application or during the loan process, you may experience delays or even a loan denial. A change of employment within the same occupational field may not cause concern, however, a change of vocation may be cause for loan denial due to lack of stability and consistency in your employment.
- Do not open or close bank accounts or move money between accounts. Most loan programs require the funds in your bank accounts be verified. If your account is brand new or has shown excessive activity including large deposits or withdrawals, verification may be more difficult. It is best to leave your bank accounts stable until after settlement.
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